Ahsan Iqbal says Chabahar to provide perfect complement to CPEC

RECORDER REPORT

ISLAMABAD: Federal Minister for Planning, Development and Reforms, Ahsan Iqbal Thursday said that Pakistan is considering Iranian seaport Chabahar as a complementing project to the China-Pakistan Economic Corridor (CPEC). Addressing the concluding session of the 32nd Annual General Meeting (AGM) of the Pakistan Society of Development Economists (PSDE) organised by the Pakistan Institute of Development Economic (PIDE), the minister said that China is not considering Pakistan as a market but the country with a shared destiny.

By sharing their development experience, the Chinese are helping Pakistan expedite its development process, he said. Commenting on the development of the Chabahar by Iran and India, the minister said that Pakistan is not looking over it as a competitor, but as a development that complements CPEC. The South Asia is among the poorest integrated regions in the world and the CPEC is not just a project of Pakistan, but something linking the whole region, he added.

Ahsan Iqbal said that the policies should be research-based and should not be formed on the basis of gut feelings, adding that the solutions to the problems should be based on empirical evidence and not on mere judgements. For this to happen, the ideas must be discussed in an open environment and the discourse must be free and frank, he maintained.

Highlighting the importance of CPEC for Pakistan, Iqbal said the project is not only a game changer, but it could also be a fate-changer if it is implemented correctly.

He said over 10 years ago, the world was looking Pakistan in view of its security situation, but now every government and think tank is looking for opportunities they can avail through CPEC with everyone expressing the desire to join its projects. Giving the examples of giants like Blackberry and Nokia, which had lost their places as global leaders, he said, "We must adapt to the changing conditions around the world or else we would be left behind."

The minister said that CPEC is not just about transportation infrastructure and energy projects. It is a framework that is much broader, holistic and looks at all the socio-economic factors of development. Infrastructure and energy are important as they are the current bottlenecks for development.

In the last sixty-six years, 16,000 to 17,000 megawatts of energy were added to the system, but the coming three years would see a record addition of 11,000 megawatt increase in power production, which makes it the biggest ever investment in the energy sector in Pakistan. He added that it was the small medium enterprise (SME) sector that paid the price of energy shortages as the large sector had alternatives. "Through CPEC we are also removing transport and infrastructural bottlenecks," he said.

Professor Athar Hussain, Director Asia Research Center, London School of Economics, UK, delivered 'Quaid-i-Azam Lecture' themed "Regional and Domestic Political Economy." The session was chaired by Ahsan Iqbal, while Professor Hussain's paper was discussed by Haroon Sharif, Advisor Regional Economic Co-operation, South Asia, Professor Tariq Amin Khan, Ryerson University, Toronto, Canada, and Dr Ashfaque Hasan Khan, Dean, NUST, Islamabad. The 'Quaid-i-Azam Lecture' focused what is the most striking feature of the geographical distribution of economic activities or entities.

Professor Hussain said that uneven distributions arise from a variety of causes, some of which are obvious, while others are complex and made up of a number of separate but interacting factors. He argued that with some exceptions economic activities are mobile in principle and can be relocated at a number of alternative locations. The exceptions are those that are tied to some natural resources in that case they are determined by the availability of that particular resource.

Professor Hussain said that the main determinant of selecting a location is the trade-off between the economies of scale, transport cost and market size. He concluded his talk by giving implications of NEG for regional policy. He said that NEG points to strong trends towards concentration and agglomeration, a trend that seems contrary to reducing regional inequalities. The focus of regional policy, therefore, should be increasing the attraction of backward regions through investment in local infrastructure and improving local human capital.